Public prosecutor in Spain accuses Shakira of €14.5 million tax fraud

The public prosecutor in Barcelona has today filed an accusation against Shakira for tax fraud. The written report concludes that the Colombian singer feigned tax residency in the Bahamas in order to avoid paying taxes in Spain. The amount that she evaded, according to a final report from the Spanish Tax Agency, is €14.5 million.

The public prosecutor is accusing Shakira of six tax fraud offenses, committed between 2012 and 2014. The charges are also directed at a lawyer based in New York who allegedly helped her create a “web of companies” in order to commit fraud.

Shakira joins a growing list of Spain-based celebrities to have been targeted by tax authorities over the years; these include soccer stars Cristiano Ronaldo and Leo Messi, tennis champion Rafa Nadal and opera singer Montserrat Caballé.

The prosecutor considers that during the years under investigation the singer had a fixed abode in Spain, once her relationship with Barcelona FC player Gerard Piqué became public. The law states that once a citizen spends more than half the year in Spain, they must be considered a tax resident and pay the corresponding duties to the Spanish Tax Agency.

In their own report, tax inspectors admitted that they were unable to prove that Shakira spent more than half the year in Spain in the three years under scrutiny. The closest was 2014 with 140 days. The tax agency nevertheless finds her a resident because the rest of the time she was only “sporadically absent” for work purposes.

The written accusation underscores that since 2012 Shakira “had been living in Spain regularly,” first in Barcelona and later at a house she and Piqué bought in Esplugues and which “became the family residence.”

Prosecutors note that the internationally acclaimed singer spent “short stays” out of Spain “in different countries and for professional reasons.” With the exception of her six-month participation as a coach in the US television talent show The Voice, Shakira “effectively remained in Spain” most days out of the year.

Shakira’s representatives told tax authorities “on numerous occasions” that her fiscal residence was in Bahamas, where she had bought a property many years ago with her former partner Antonio de la Rúa, the son of Argentine ex-president Fernando de la Rúa.

Spanish prosecutors refute this and say that between 2012 and 2014, Shakira “had no physical presence for a single day” in the Bahamas. As such, she “had the obligation” to pay taxes in Spain “on the entirety of her global earnings,” including income tax and estate tax.

Now a court will decide whether to accept the criminal complaint, which typically happens in the vast majority of cases brought by prosecutors. At that point, the singer will be summoned to court to give testimony.

In recent months the singer’s lawyers have been in talks with the tax agency to try to settle the matter while avoiding criminal proceedings. Shakira has already paid €20 million to cover taxes for 2011 even though she cannot be held criminally liable for any alleged evasion prior to 2012 because it would fall outside the statute of limitations.

But the tax agency believes that there was a deliberate intent to withhold taxes in 2012, 2013 and 2014, and said so in its report to prosecutors, who in turn used this as a basis for their own complaint.